Athens still has cards up its sleeve and some surprising ones are likely to be played in its negotiations with the EU before the debt deadline, John Butler, Chief Investment Officer at Amphora Capital, told RT.

RT:The latest reform proposals put forward
by Greece have been rejected by international creditors. But this
time there is one thing that differs with the latest reform plan
- defense budget cuts. Why do you think Athens included military
spending this time?

John Butler: I think they are trying to
strengthen their negotiating position to some extent. They are
trying to show “Hey, we are operating in good faith here, we are
negotiating in good faith, if we are serious about trying to come
to terms and reach an agreement, let’s go ahead and put
everything on the table,” and so they are offering now defense
cuts alongside of course the laundry list of other demands that
have already been made by the EU negotiating partners.

RT:The biggest arms supplier to Greece and
its main creditor is in fact the same country - Germany. Is there
any link to the decision to cut the defense budget now?

JB: Let’s try to put that in perspective. There
are multiple possible explanations for why the defense budget is
now being placed on the table by Greece. The first is that they
are trying to say “Look, if we are all serious about coming to an
agreement, we have to accept the fact that some of the terms may
not be beneficial for Germany or France or other countries, but
we are all in this together,” perhaps to some extent it is the
signal there. The other one is – let’s just face it, the defense
budget as a proportion of the overall budget is very small
relative to pensions and other forms of welfare. So it was never
perhaps a priority in the first place for that reason that it’s
disproportionally smaller. The third reason now is also one that
needs to be considered. Greece and other European members of NATO
have been under pressure for years by the US to increase defense
spending. US defense spending is much larger and also the UK has
put pressure on other European countries to step up to the plate
and to spend a bit more on defense so the defense spent across
NATO is more equivalent. So that’s another possible reason why
Greece’s held back up to this point from suggesting that they
should in fact cut the defense budget when there has been
pressure coming from the US to increase the defense budget.

RT:The June 30th deadline is neither the
first nor the last for Greece. Are we going to witness the same
hysteria every month till the debt is paid off in full?

JB: It’s very difficult to know what’s actually
going on here in part because when you get into a negotiation of
this kind naturally the parties involved are not forthcoming
regarding their true interests, regarding what they are trying to
achieve, trying to avoid. That uncertainty helps to strengthen
your negotiating position and now we are so far into real
brinksmanship. It’s extremely difficult to know. That said, we do
believe - or I would think that we can honestly and confidently
believe - that Greece is really trying here to negotiate from a
position of both weakness but also strength. They do have some
cards up their sleeve; some of them have to do with more than
just immediate debt issues at hand, but their broader
relationship with the euro, with the EU and geopolitical issues.
I think what we are going to see as we come to the final hours of
negotiations here are surprises. I really think we will see some
surprises. This is not going to be straight forward and it may
not reach a satisfactory resolution, it simply may not. There may
be intractable differences, but some surprising cards are likely
to be played perhaps on both sides before this is over.

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